Victoria housing market: Very few sellers in Knox record a loss

Melbourne housing market - run over 40 yearsThe latest version of RP Data’s Pain and Gain report showed that as we get closer to a new peak in dwelling values the proportion of sellers making a profit on sale is increasing.

Interestingly some of the best outcomes have been recorded in suburbs around 20 km away from the Melbourne CBD.

The report is useful for property investors, small or large, because it looks only at homes that already have an owner and whose sale price is therefore set by the market. Other market data, median prices for instance, mingles the new sales with prices set by the developers and those sold by individuals.

The report showed that only 7.7 per cent of Melbourne homes re-sold in the September quarter of 2013 incurred a loss for their owners. This was lower than the 8.2 per cent recorded in the June quarter this year and 8.3 per cent in the 2011 June quarter.

Of course the longer the home was owned the more likely the owner was to see a profit on sale. The highest proportion of owners selling for more than double what they paid had owned their homes for between 10 and 15 years.

In overall terms the highest overall profit was recorded in more expensive areas with sellers in Boroondara recording $231M in profit in three months. Whitehorse ranked second with $159M in profit and Monash third with $136M.

Despite the very high profits recorded in those inner and middle eastern municipalities it was sellers in Knox that probably had the best outcome with only 2 per cent recording a loss. Those losses totalled only $360,000, less than the value of one house. Second on the list was Manningham where 3.9 per cent of sellers recorded a loss and third was Maroondah with 4.3 per cent.

Robert Larocca
RP Data Victoria Housing Market Specialist

About Robert Larocca

Robert Larocca has built a profile over the past eight years as an expert on the Victorian residential property market. He worked for the REIV both directly and as a consultant over 8 years acting as a spokesperson, managing its research department and public policy. He has been a media and government relations consultant and spent a decade working across the three levels of government including as a Councillor and Mayor in the City of Moreland. He has well developed leadership skills in the not for profit sector and has been the Chairperson of CERES Community Environment Park for 9 years.

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